The recent amendment to Section 230(1A) of the Income Tax Act, 1961, does not require all Indian citizens to obtain an Income Tax Clearance Certificate (ITCC) before travelling to other countries, the Central Board of Direct Taxes (CBDT) said in a clarification in response to widespread misinformation.
According to the CBDT, the amendment, introduced through the Finance (No. 2) Act, 2024, only incorporates references to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the ‘Black Money Act’).
“This insertion has been made to also cover the liabilities under the Black Money Act in the same manner as the liabilities under the Income Tax Act, 1961 and other laws dealing with direct taxes for the purposes of Section 230(1A) of the Income Tax Act, 1961,” CBDT said in the statement.
The requirement to obtain an ITCC is not universal: CBDT
According to the CBDT, since its introduction in 2003, the provision has only been applicable to individuals under specific circumstances. “Only certain persons, in respect of whom there are circumstances necessitating obtaining a certificate of fiscal solvency, are required to obtain such a certificate. This provision has been in law since 2003 and remains unchanged even with the amendments in the Finance Act (No. 2) of 2024,” the CBDT said.
- Persons involved in serious financial irregularities.
- Those persons who have arrears in payment of direct taxes exceeding Rs 10 lakh which have not been suspended by any authority.
- A person may be required to obtain a tax clearance certificate only after recording the reasons for doing so and after obtaining the approval of the Principal Chief Commissioner of Income Tax or the Chief Commissioner of Income Tax.
First published: August 20, 2024 | 21:42 IS
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